HANNOVER, Germany (AP) — Germany's leader has told Russian President Vladimir Putin that the Kremlin needs to encourage civil society as well as push for technological modernization, underlining tensions as Putin seeks to bolster economic ties with a visit to a major trade fair.

Putin's trip to the central German city of Hannover highlights Russia's interest in developing foreign trade, including further business ties with Germany. The two leaders were touring the fair on Monday.

At the opening of the event on Sunday, German Chancellor Angela Merkel said real modernization is enhanced by a strong civil society. Germany's ties with Russia have been strained lately by the Kremlin's heavy-handed response to opposition groups and pressure on non-governmental organizations.

Merkel said Germany was ready to help Russia diversify its economy, pointing to innovation, research and training as key points.

"We are convinced that this can best succeed if there is an active civil society," she said. "We must intensify this discussion ... and also give nongovernmental organizations — the many groups that we in Germany know as motors of innovation — a good chance in Russia."

A law approved last year in Russia requires all NGOs that receive funds from abroad and engage in vaguely defined political activities to register as "foreign agents," a term invoking Cold War-era spying connotations.

Leading Russian NGOs have pledged to boycott the bill. Putin responded by ordering wide-ranging checks of up to 2,000 NGOs across the country to check their compliance with the law. Among others targeted were two German think-tanks — the Konrad Adenauer Foundation, which is aligned with Merkel's conservative Christian Democratic Union, and the Friedrich Ebert Foundation, linked to the opposition Social Democrats.